In my post about finishing my taxes I referenced how much our refund was going to be. Sarah asked why I included the number with the implication that information about our finances is personal and should be held back from public discussion. Ever since I graduated from college and started moving towards financial independence, personal finance has become an interest of mine. Growing up I never really knew much about our family’s finances, sometimes money was tight, but we always lived within our means. That’s the number one thing I’ve learned about money and is the key to saving for the future and being financially secure.
Personal finance is an important part of our lives, so why are we reluctant to talk openly about money? It might be that we still see money as a symbol of status. We might be ashamed of debts. We might not want to feel like we are bragging or putting ourselves above others. Whatever we feel though, it is most likely tied to emotions and as far as I can tell emotions and money don’t mix. In my life I have “unpersonalized” personal finance.
But how open should we be? I’m not suggesting we announce our income and current portfolio value when meeting someone, but when talking to friends and family I’d be open to asking for and offering advice. Getting advice and working out finance problems is incredibly important considering the opposition we face in our consumer spending driven society. I think we should be open enough to discuss our tax situation and tactics we use to reduce our tax liability. We should be open to discussing how we are saving for retirement. We should be open to talking about problematic debt and helping each other eliminate it.
What do you think, are finances open for discussion or private matters?
Money is certainly involved in measuring oneself against others, a pretty natural human trait, and that is full of emotions. Whether or not one should compare themselves to anyone else is a different discussion, but finances have a TON of emotion in them. Last I heard “money problems” was one of the main reasons people got divorced. Our financial situation can certainly impact our emotional situation, so trying to approach it as a purely intellectual entity is tough. You might be able to do it in a bubble, but in society at large it’s a very personal issue. Next to someone’s favorite position in bed, I can’t think of anything quite as personal as “personal” finances.
While I think finances are largely personal, discussions about good financial decisions don’t have to be. How much money someone makes or has isn’t that important when it comes to making good financial decisions. Don’t spend more than you have, save for a rainy day, be frugal, etc. all function as good advice without knowing a person’s bottom line.
Are finances open for discussion? Of course, but like many things that are personal, it’s something that requires trust and love.
There’s my 2 cents.
Well stated Nate, the emotion element is HUGE.
I can equate talking (beyond casual) about personal finance the same as talking about one’s sex life.
That is to say I consider my finances and related decisions VERY personal and something I only feel comfortable talking about with my wife.
Talking about either seem to present the possibility for bragging and while it may be a natural human response, it doesn’t help anyone.
I don’t see the benefits in knowing details (TMI) about my friend’s financial situations or them knowing mine. It just seems like it could present opportunities to ruin good relationships.
Unless someone is seeking help or bluntness… most people don’t like being told they’ve made (or will make) BIG mistakes, that is most people don’t like being told what to do.
I think you’d find that many people take their personal finances VERY personal.
Good topic.
I think Denise will have to chime in and give us the low down on the psychology of money because I’m just not getting WHY it is so personal. If both of you feel so strongly about keeping financial matters inside your marriage then that’s most likely the case for the vast majority of people. I’m curious why people like myself and those involved in the “blogging away debt” movement are so willing to lay it all out on the table.
Nathan: Funny that the same stigma gets attached to sex and money, is that how you feel or how you think society views it?
Angelo: To me there’s just so much more to finances than how much money we make. If I found out someone spends half as much money as I do on food every month I wouldn’t be worrying about them bragging or it ruining our relationship. I’d want to know what they’re doing to spend less money on food so I could reduce my budget. Heck if I cut my food budget in half I could take a decent vacation every year or put away more money to shave off time before retirement.
The more information we’re able to gather the better decisions we’ll be able to make and avoid costly mistakes. Reliable financial information is only going to come from people that care about us like friends and family; society is only interested in parting us from our money.
I’m an accountant by trade, and let me tell you that the amount of refund you are received on a particular year is one of the identifier the IRS uses to probe that you are who you are when you call them. Remember that in the event of anyone trying to get access to your financial information the more information they have about you the easier is for them to make your life a little harder to deal with. Just my two cents, I do get what you mean in terms of sharing little things like this, is like going personal with your fans. Take care dear. Luis
I never said I wasn’t open to discussing financial matters, and from your original post you even said you don’t think people should have to reveal their bottom line, so I think we agree on that point. I only wanted to point out that I think money can be a very emotional issue.
I think what you’re not getting is that this isn’t a discussion about how the “discusser” feels. It really doesn’t matter how YOU feel about YOUR money, because the reason talking about money is so taboo is because of how it makes OTHER people feel. The reason I don’t go around announcing how much money I make isn’t because of how I feel, but because of how it might make others feel.
Now why does money illicit so many strong emotions? There are hundreds of reasons, and just because you or I don’t adhere to them doesn’t change the fact that many in society do. Money is an indicator of success, power, freedom, intelligence, etc. Whenever you compare money, you are comparing those things. It’s probably jealousy in its purest form. Even if you can separate all emotion from your finances, that doesn’t mean other people can. I think we need to be aware of how our actions can affect those around us.
Anyways, I welcome all future discussions about financial decision making. Speaking of which, I should do my taxes. :)
And I was referring more to how society feels than I do personally. I’m open to discussing specifics of finances with those close to me, but it’s not something I would probably blog about openly.
Since I’m so young and trying to get ahead of the retirement game I need to learn as much as I can. So far I’ve been relying on blogs like Get Rich Slowly to figure out what I should be doing. I would love it if every retired person I met told me one thing they did right and one thing they did wrong while preparing for retirement.
If I do blog about finances it really won’t have much to do with how much you make, but more with what you do with what you have. One thing I want to do is crunch the numbers of financing cars vs buying them outright over a lifetime and seeing how much the interest adds up to.
Funny, I once spent a few weeks meeting with a Korean student at Fuller to help his work on his English, and to acquaint him with American social behavior. He was plainly at a loss as to how to introduce himself to me, telling me that in his country, you introduce yourself by sharing, among other information, how old you are and how much money you make a year. Reason being that in many cultures, it is important to establish status and hierarchy immediately so as to know who you are below and above–ie who to respect, and who you deserve to be respected by. I told him these are usually the last things Americans share, particularly in a first meeting, reason being we are an egalitarian society and prefer not to establish hierarchies (except in less explicit ways like who has a nicer car? bigger house? perkier boobs? etc).
So some of the privacy is due to American egalitarian-proneness, and I love the American approach. But to switch gears and speak theologically, the American approach is not synonymous with the Christian approach. Christians are called to be held accountable in ALL THINGS, and it is a good psychological and theological rule that the thing you’re most afraid of is the thing most likely to bite you in the ass (not a direct scriptural quote). It is absolutely positively beyond 100% true that the two reasons people get divorced (Christians being no exception) are sex and money, and the privacy (see: secrecy) around those issues are what make them such easy fodder for quiet sin. If no one knows you’re struggling sexually, no one will know when you have the first affair/prostitute. If no one knows your financial situation, no one can keep you accountable and help you take an honest look at your spending habits. Not that EVERYONE needs to know, but having a trusted friend or couple to help you look at some of these things is absolutely necessary. And trustworthiness is key–no sense sharing with someone who will later make you regret your openness.